Kennedy: This could be our SDP moment

The Lib Dem leader claims his party is on the verge of a major upset in the rock-solid Labour seat

Charles Kennedy, the Liberal Democrat leader, believes his party is on the verge of an "SDP moment". A group of voters could be about to behave in a manner so startling that the Government will have to take notice. We will know if he is right by the end of the week, because the event he has in mind is Thursday's by-election in the west London seat of Brent East.

It has been so long since a by-election registered on national politics that most people have forgotten how important they used to be. The event that triggered Margaret Thatcher's downfall was the loss of a safe Tory seat in Eastbourne. When the Tories lost Newbury, 10 years ago, John Major was finally driven to sack his unpopular Chancellor, Norman Lamont.

Tony Blair has never had such worries. The last time Labour lost a seat in a by-election was 15 years ago, when the Scottish Nationalist Jim Sillars seized Glasgow Hillhead. In the early 1980s spectacular victories by the Liberals and the new SDP nearly pushed Labour out of business.

On paper, this contest is a shoo-in for the Labour candidate, the MEP Robert Evans. His predecessor, Paul Daisley, who died of cancer in June, held the seat in 2001 with a 13,047 majority. Yet Mr Kennedy, who admits to being no expert in the art of predicting voting patterns, is ready to risk making an awful fool of himself by talking of victory for his 29-year-old candidate, an Islington councillor named Sarah Teather.

"The kind of constituency Brent is, it's hard to be scientific about it," he admitted. "I think an awful lot of people probably won't vote. At the same time, there's a lot of angry people, and the longer they see a political campaign going on in their own community, the more that some will be encouraged to vote. Yes, there is a striking chance of winning this by-election."

The way Brent voters have been button-holing visiting Liberal Democrat politicians had reminded them of "the period round about the launch of the SDP, when people were wanting to engage in quite a long conversation about their unhappiness with the overall state of politics", Mr Kennedy said. "It could just be we're looking at another of those moments in British politics."

Labour claims that this talk is all bluff, and that the Liberal Democrats are simply talking up the contest to maximise their chance of coming second. But privately, Labour party members on the spot admit that part of their vote will peel off, though not necessarily to the Liberal Democrats, when there is a big range of anti-war fringe candidates. They were relieved last week to see leading Conservatives trooping in to stop their vote from collapsing, and have gratefully accepted the support of the Mayor of London, Ken Livingstone, Labour MP for Brent East for many years before his expulsion from the party.

Even a strong second place could raise Liberal Democrat spirits as the faithful gather in Brighton next week for their annual conference.

In the past year, Mr Kennedy has given the voters a clearer idea of what his party is not. It is not the soft wing of the Labour Party. The idea of Labour and the Liberal Democrats joining in some alliance to keep the Conservatives permanently out of office, a vision that Mr Kennedy's predecessor, Paddy Ashdown, shared with Mr Blair, has vanished in acrimonious arguments over Iraq and public service reform.

What is less visible to the average voter is what the party is for. Its one clear and well-known economic policy used to be to increase income tax by 1p in the pound to spend on education, but that has now been dropped.

The big idea Mr Kennedy wants to put in its place is the drastic reduction in the size of central government, including the abolition of eight ministries, which will be the main theme of the Liberal Democrat conference.

"Where delivery is failing isn't that because we can only deliver successfully by deciding locally?" he says. "That's the widening gulf between us and the Government."